Tokyo will likely use the possibility of purchases from the US' proposed 20mn t/yr Alaska LNG export project, as part of wider efforts to reduce the US' trade deficit with Japan, to negotiate for a better tariff deal.
US president Donald Trump's 10pc tariff on imports from all countries took effect on 5 April, with exemptions for some commodities. The higher "reciprocal" taxes are due to enter into force at 12:01 ET (04:01 GMT) on 9 April, including Japan at 24pc.
The Japanese government on 8 April held its first ministerial task force with prime minister Shigeru Ishiba attending, to discuss potential measures against new US tariffs. Details are still under consideration, but Ishiba is ready to use every possible method to mitigate the impact of looming US tariffs on the Japanese economy, as he sees this as a "national disaster".
Japan, a long-standing ally of the US, is unlikely to respond in kind to the US tariff and will instead seek mutually beneficial solutions. Ishiba is aiming to present Trump with a package of measures across a wide range of issues, such as in the energy, agriculture, shipbuilding and automobile sectors, rather than piecemeal requests. The package could include Japan's stance on the Alaska LNG project and ethanol developments, Ishiba stated on 7 April when responding to questions in the Diet.
Tokyo may use the Alaska LNG as part of its tariff negotiation, as buying more US LNG could ease Japan's trade surplus against the US. The trade imbalance between Japan and the US stood at ¥8.64 trillion in 2024, equivalent to about $58.6bn at current exchange rates, Japanese customs data show. Japan's LNG purchases from the US rose by 15pc on the year to 6.34mn t in 2024, accounting for nearly 10pc of the country's total LNG imports.
Japan has committed to continuing strengthening energy security and co-operation with the US, as well as South Korea, leveraging US LNG along with other energy sources and technologies in a mutually beneficial manner, the countries said in a joint statement after the trilateral foreign ministers' meeting in Brussels on 3 April, just after Trump announced the baseline 10pc taxes on 2 April.
Ishiba had already mentioned the idea of ramping up purchases of US LNG, as well as ethanol, ammonia and other resources, when he visited Trump in Washington in February. But he emphasised the importance of stable and reasonable prices for such LNG imports.
Alaska LNG has made little progress in recent years and is yet to secure any offtake agreements. But it has drawn interest, after Trump devoted one of his first executive orders to the development of Alaskan energy. South Korea's energy minister expressed the country's interest in the project during a visit in late March, while Taiwan's state-owned CPC signed an initial agreement to invest in and purchase LNG from the project, according to Taiwan's Ministry of Economic Affairs.
Auto deal
But it remains unclear if a possible purchase of Alaska LNG alone would satisfy Washington and help reduce tariffs. The Trump administration has expressed strong dissatisfaction against Japanese non-tariff barriers on US car deliveries.
"US automakers face a variety of non-tariff barriers that impede access to the Japanese and Korean automotive markets, including non-acceptance of certain US standards, duplicative testing and certification requirements, and transparency issues", the US government said on 2 April.
Japan imported around 23,000 units of passenger vehicles from the US in 2023, according to the industry group Japan Automobile Importers Association, and this is near one-tenth of all deliveries from European nations.
Tokyo appears to be struggling to find breakthrough solutions on this decades-long bilateral economic issue. There must be a variety of reasons on why American cars are not coming into the Japanese market, while Japanese cars are selling well in the US, said the Japanese minister for trade and industry Yoji Muto on 8 April. "We still need more time to figure that out."
Ishiba on 8 April appointed the minister of state for Economic and Fiscal Policy, Ryosei Akazawa, as a negotiator for the trade talks with the US government.
